Sri Lanka’s SME board to open equity financing to smaller firms
ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange and Securities and Exchange Commission said a new listing platform to be launched on July 05, will make equity finance available to smaller companies.
"That national imperative is to usher in, an economically strong, politically stable, socially responsive, Sri Lanka," Ranel Wijesinghe, Chairman of Sri Lanka’s Securities and Exchange Commission said in a statement.
"Within that context, there is an imperative, that we develop the Small and Medium Enterprises sector.
"If we are to achieve economic growth with equity, across the length and breadth of the country, with balance in economic development and employment, between the city and the rural village and between agriculture, industry and services, and among and between representatives of religions and communities, there is a compelling national imperative the country has to address."
Chairman of the Colombo Stock Exchange Ray Abeywardena said the listing will not only provide access to capital but also improve governance of smaller firms helping them grow faster.
"Apart from access to capital, the new listing platform will offer SMEs opportunities to build credibility through disclosure of information and balanced governance standards, which would enhance their visibility and attract strategic investors," Abeywardena said.
"The new listing platform has the potential to make an all-round impact, bringing a positive change and shaping the stature and longevity of an SME for years to come".
The SEC will take several initiatives to encourage and give opportunities for SMEs to access the board.
• An invitation to all public and private sector banks to identify, guide and assist existing customers, potential SME Public Listed Companies (PLCs), to seek equity funding, through a listing on the SME board.
• An invitation to all apex, national and regional chambers to nominate and assist potential SME PLCs.
• An invitation to all accounting and auditing firms, consulting and other firms to introduce and assist potential SME PLCs.
• A special invitation to the Small and Medium Practitioners- the SMPs individually, or through the formation of consortia, to assist SMEs in developing prospectuses.
• An invitation to multilateral and bilateral development partners such as the World Bank, the Asian Development Bank, Japan International Cooperation Agency and other institutions to partner the SEC-CSE SME initiative.
• Mobilisation of island wide “domestic” roads shows where teams of the above will travel to key cities in the north, south, east and west of the country to popularise the initiative and to facilitate listings.
• Establishing, clusters of SEC and CSE staff who will be deployed to expedite answers to questions, clarifications, and approvals of prospectuses.